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DRM 2053

Negotiation
Techniques
DR HJH AIDA NASIRAH ABDULLAH
NEGOTIATION 7e
Lewicki Saunders
Barry

UNIVERSITI PERTAHANAN NASIONAL MALAYSIA

1-1

2-1

Week 7

COGNITIVE BIASES IN
NEGOTIATION

2015 by McGraw-Hill Education. This is proprietary material solely for


authorized instructor use. Not authorized for sale or distribution in any
manner.

5-2

COGNITIVE BIASES IN NEGOTIATION


Negotiators have a tendency to make

systematic errors when they process


information. These errors, collectively
labeled cognitive biases, tend to impede
negotiator performance.

2015 by McGraw-Hill Education. This is proprietary material solely for


authorized instructor use. Not authorized for sale or distribution in any
manner.

5-3

COGNITIVE BIASES

The winners
Irrational
curse
escalation of
Overconfidence
commitment
Mythical fixed-pie The law of small
numbers
beliefs
Self-serving
Anchoring and
biases
adjustment
Endowment
Issue framing
effect
and risk
Ignoring others
Availability of
cognitions
information

2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor
use. Not authorized for sale or distribution in any manner.

5-4

IRRATIONAL ESCALATION OF
COMMITMENT AND MYTHICAL
FIXED-PIE BELIEFS
Irrational escalation of commitment
Negotiators maintain commitment to a course
of action even when that commitment
constitutes irrational behavior
Mythical fixed-pie beliefs
Negotiators assume that all negotiations (not

just some) involve a fixed pie

2015 by McGraw-Hill Education. This is proprietary material solely for


authorized instructor use. Not authorized for sale or distribution in any
manner.

5-5

ANCHORING AND ADJUSTMENT


AND ISSUE FRAMING AND RISK
Anchoring and adjustment
The effect of the standard (anchor) against
which subsequent adjustments (gains or
losses) are measured
The anchor might be based on faulty or
incomplete information, thus be misleading
Issue framing and risk
Frames can lead people to seek, avoid, or be

neutral about risk in decision making and


negotiation
2015 by McGraw-Hill Education. This is proprietary material solely for
authorized instructor use. Not authorized for sale or distribution in any
manner.

5-6

AVAILABILITY OF INFORMATION
AND THE WINNERS CURSE
Availability of information
Operates when information that is presented
in vivid or attention-getting ways becomes
easy to recall.
Becomes central and critical in evaluating
events and options
The winners curse
The tendency to settle quickly on an item

and then subsequently feel discomfort about


a win that comes too easily
2015 by McGraw-Hill Education. This is proprietary material solely for
authorized instructor use. Not authorized for sale or distribution in any
manner.

5-7

OVERCONFIDENCE
AND THE LAW OF SMALL NUMBERS
Overconfidence
The tendency of negotiators to believe that
their ability to be correct or accurate is
greater than is actually true
The law of small numbers
The tendency of people to draw conclusions
from small sample sizes
The smaller sample, the greater the
possibility that past lessons will be
erroneously used to infer what will happen in
the future
2015 by McGraw-Hill Education. This is proprietary material solely for
authorized instructor use. Not authorized for sale or distribution in any
manner.

5-8

SELF-SERVING BIASES
AND ENDOWMENT EFFECT
Self-serving biases
People often explain another persons
behavior by making attributions, either to the
person or to the situation
The tendency, known as fundamental
attribution error, is to:
Overestimate the role of personal or internal

factors
Underestimate the role of situational or external
factors

Endowment effect
The tendency to overvalue something you
ownEducation.
or believe
possess
2015 by McGraw-Hill
This is proprietaryyou
material solely
for
authorized instructor use. Not authorized for sale or distribution in any
manner.

5-9

IGNORING OTHERS COGNITIONS


AND REACTIVE DEVALUATION
Ignoring others cognitions
Negotiators dont bother to ask about the
other partys perceptions and thoughts
This leaves them to work with incomplete
information, and thus produces faulty results
Reactive devaluation
The process of devaluing the other partys
concessions simply because the other party
made them
2015 by McGraw-Hill Education. This is proprietary material solely for
authorized instructor use. Not authorized for sale or distribution in any
manner.

5-10

MANAGING MISPERCEPTIONS AND


COGNITIVE BIASES IN NEGOTIATION
The best advice that negotiators can
follow is:
Be aware of the negative aspects of
these biases
Discuss them in a structured manner
within the team and with counterparts

2015 by McGraw-Hill Education. This is proprietary material solely for


authorized instructor use. Not authorized for sale or distribution in any
manner.

5-11

MOOD, EMOTION, AND NEGOTIATION


The distinction between mood and

emotion is based on three


characteristics:
Specificity
Intensity
Duration

2015 by McGraw-Hill Education. This is proprietary material solely for


authorized instructor use. Not authorized for sale or distribution in any
manner.

5-12

MOOD, EMOTION, AND NEGOTIATION


Negotiations create both positive and

negative emotions
Positive emotions generally have
positive consequences for negotiations
They are more likely to lead the parties

toward more integrative processes


They also create a positive attitude toward
the other side
They promote persistence
2015 by McGraw-Hill Education. This is proprietary material solely for
authorized instructor use. Not authorized for sale or distribution in any
manner.

5-13

MOOD, EMOTION, AND NEGOTIATION


Aspects of the negotiation process can

lead to positive emotions


Positive feelings result from fair procedures

during negotiation
Positive feelings result from favorable social
comparison

2015 by McGraw-Hill Education. This is proprietary material solely for


authorized instructor use. Not authorized for sale or distribution in any
manner.

5-14

MOOD, EMOTION, AND NEGOTIATION


Negative emotions generally have

negative consequences for negotiations


They may lead parties to define the situation

as competitive or distributive
They may undermine a negotiators ability to
analyze the situation accurately, which
adversely affects individual outcomes
They may lead parties to escalate the conflict
They may lead parties to retaliate and may
thwart integrative outcomes
2015 by McGraw-Hill Education. This is proprietary material solely for
authorized instructor use. Not authorized for sale or distribution in any
manner.

5-15

MOOD, EMOTION, AND NEGOTIATION


Aspects of the negotiation process can

lead to negative emotions

Negative emotions may result from a

competitive mind-set
Negative emotions may result from an
impasse
Negative emotions may result from the
prospect of beginning a negotiation
Effects of positive and negative

emotion

Positive emotions may generate negative

outcomes
Negative feelings may elicit beneficial
2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor
use. Not authorized for sale or distribution in any manner.

5-16

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